FURTHER LEGAL ACTION

It has come to our attention that some employers are experiencing difficulties with MIBFA Pension Fund (‘the Fund’) deductions.

All employers within the scope of MEIBC are obliged to register with the Fund and must deduct certain amounts from their employees’ salaries and pay these amounts, together with the company contribution, over to the Fund.

The only exception is employers who have been granted an exemption by the MEIBC. This will only be employers who have a different fund which has been accepted by the MEIBC.

Employers who fail to deduct these monies, will be held personally liable for both the company and the employee contributions, and any late payment interest thereon. These employers can face civil litigation in the High Court, which has the detrimental effect of additional legal fees being payable by themselves, whether the matter is opposed or not.

Employers who deduct these monies, yet fail to pay over such amounts to the Fund, do not only run the risk of the above mentioned civil litigation, but criminal proceedings may also be instituted against them. Every director of a private company, or every controlling member of a closed corporation, can be held liable in their personal capacities and, in terms of the Pension Fund Act, face severe penalties or even imprisonment.

Even though these employers may face civil and criminal proceedings, this can be avoided through negotiations with the Fund and/or their collection agents, who have been mandated to collect any arrear contributions and interest. It is of crucial importance that such negotiations start sooner rather than later.

It has become apparent that these collection agents have been utilising scare tactics and extortion in the fulfilment of their mandate and employers are advised that once any communication has been received from any collection agent of the Fund, to contact your nearest regional office as soon as possible, before attempting to negotiate themselves.